The US-Cuba Embargo Created A Bizarre World Where Waiters And Artists Are The Richest People

After more than 50 years of halted diplomatic relations between Cuba and the US, President Obama announced today that the situation would finally start to normalize.

“We will end an outdated approach that for decades has failed to advance our interests,” he said in a statement at the White House.

The embargo, however, didn’t just fail to help. It turned Cuba’s social structure completely upside-down.

In Cuba today, native Cuban and renowned photographer Tony Mendoza tells Business Insider, waiters and artists sit at the top of the socioeconomic ladder. “It’s a hilarious society because … these people are the classes that are the wealthiest individuals,” he explains.

Ironically, Fidel Castro, equally a socialist and a nationalist, sought to elevate the working man — every working man. In reality, his rebellion in 1953 sparked years of political and economic suppression and foreign aid.

Furthermore, the incentive structure ended up being all wrong.

First of all, waiters in Cuba receive tips directly from tourists, according to Mendoza, which boosts their incomes. In general, tourism, a “non-state” sector, is essential to Cuba’s economy. In 2012, 2.8 million visitors flooded the country, accounting for nearly $US3 billion in revenue. With the embargo lifting, American tourists can soon join the fun.

Similarly, Mendoza says Cuba has permitted artists to hold exhibitions abroad, free of the government’s watchful eyes. “They’re the cultural reps of Cuba,” Mendoza says. According to him, artists keep about 50% of their earnings.

“The embargo was a disaster because the people who were free of kissing the government’s arse and who were independent of the government salary were the wealthiest,” Mendoza adds.

For example, if you work at a gas station, you might siphon off some gas during the day to sell later. Or contractors often steal concrete blocks. “Everybody does it,” Mendoza says.

REUTERS/Diario GranmaCuban President Fidel Castro is shown blowing the birthday candles on his 70th birthday in this file photo in Havana, August 13, 1996.

In 1996, when Mendoza went back to his homeland for the first time since leaving in 1960, he flew into Santiago and hired a driver to travel to Havana. Not once did his driver stop at a gas station for fuel. He would pull up in front of random houses, make small talk, and then the resident would grab a small tank of gas and fill the car.

“In order to get any simple commodity, you have to figure who’s selling it, and who needs to be buying it,” she wrote, as NPR noted. One of her friends even gave her the phone number of a black market food provider, selling blue cheese, Parmesan, Serrano ham, and smoked salmon.

At this point, Cuba didn’t really have a choice but to kiss and make-up with the US because the entire economy depends on a state about to collapse.

“When I came back,” Mendoza says,” it was so clear to me that the embargo was a disaster, and it didn’t work.”

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.